Nasdaq And Nasdaq 100 Blast-Off To New Near Seven Year Highs On Higher Volume; Bears Continue To Get Run Over!
October 31, 2007 | Leave a Comment
It was another purely amazingly bullish day with all the indexes closing near their HOD and on higher volume. There is nothing else to say to that except that it was very bullish. The most bullish point of today’s rally was that intraday ahead of the Fed rate announcement the markets swooned right past the early morning lows that was set right after the opening bell. But as soon as it cut to new lows it made a very sharp V-move right back up blowing past the intraday resistance. After a late-day pullback the buying came flying in again thus sending stocks higher into the close. Simply a fantastic day. I don’t say “WOW” often….but WOW!
Breadth was good, new highs were better than lows, my charts look great, and after going through my scans I see TONS of stocks setting up in good bases and have many potential long candidates for you tonight. I simply have not seen this many great looking/moving stocks at one time. This is truly a very unique and amazing period. Enjoy it while it is here!! It doesn’t happen often and we should definitely remember these times. They seem to happen every four years and feel great.
Late Day Reversal Kills The Buzz From Today’s Rally As Volume Expands On The Nasdaq And NYSE
October 30, 2007 | Leave a Comment
When you look at a daily chart of the NYSE or Nasdaq it doesn’t look like today was that bad. But no matter what that chart looks like, something felt bad about that late day breakout reversal (best viewed on a 60-minute chart). Late in the day, just after 3pm EST, the Nasdaq broke out to new daily highs. But right after the excitement buying entered, some pretty heavy selling was followed. The market sold off hard and fast in a very short time, and even though the selling slowed at the end, the big cap indexes all finished near their lows of the day.
Now, just like I said, the markets look fine on a daily chart and the volume on the NYSE was lower but it was still higher on the Nasdaq. If you count today as churing, this makes it 6 distribution days for the Nasdaq for the past three weeks. If you don’t count today, yet, it is only 5. On the SP 500 there is six, after today, making it officially under a yellow-flag caution to watch out for further selling. I would be a bit careful here with new longs, with the market seeing so much distribution on the way up.
What made me think that today was worse than what the indexes told is because my account took a hit and the IBD 100 fell 1.9% today, confirming that leading growth stocks were targeted. Dry-bulk shippers took the brunt of the selling. The other clear sign that something “might” (remember the trend is still up so we MUST keep a bullish bias for now–just be ready for anything) be wrong is that I have two short scans that search for shorts. One is set up to look for stocks over $75 that are down on the day, below the 50 day moving average, and trades over 250,000 daily. That scan has not seen the number over 20 since August. Even on the 11th and 19th there were not that many stock down as today. Today there were 27 stocks on the list. That raises a yellow-flag also.
Aloha From San Fransisco; Stock Market Ends The Week The Way It Started–Putting In Extremely Bullish Intraday Reversals To Close Near/At The HOD
October 28, 2007 | 1 Comment
The market continues to do the most bullish thing it can do by dipping intraday and closing near or at the HOD. The SP 500 was the winner of the best acting index this weekend with its gap open, move lower, and close very very very close to its HOD. The action of the market the past week just simply doesn’t get much more bullish.
Anything can happen in the stock market and all the greatest traders are prepared to act immediately to a changing market. But if the market reverse from this very bullish acting week, we can expect a large selloff as the moves this week in the market were very very very bullish. All the gap lowers and higher followed by some pretty large dips all led to the market putting in bullish reversals and moving higher. I just couldn’t have asked for anything more. I doubt we will get a repeat of this week, next week.
I am really busy and have been on the GO GO since arriving and right now is no different. So I must bid you farewell for today. I will see you Monday where it will probably be a small commentary but by Tuesday I will be fully back in the saddle.
Stocks Put In Another Bullish Intraday Reversal; MSFT Explodes 11% After-hours Setting Us Up For A Gap Higher
October 26, 2007 | Leave a Comment
As the title says MSFT exploded 11% after-hours which has to be a victory for the bulls considering that the bears got the upper hand today by sending stocks lower with a ton of stocks blowing up. This gap higher however appeared to have only a small positive effect on the futures as the Nassy futs are only up 6 points after being up 12 at one point. However, the gap higher is still a positive setup for stocks, after yet another weak session.
But the session was not nearly as weak as the closing prices indicate because stocks were, once again, much lower intraday before a round of dip buyers showed up sending stocks well off their lows. This was the fourth day in a row (clearly visible with candlestick or closing price only bar charts) that the major market indexes put in a bullish intraday reversal to close well off the lows. This puts very bullish tails (“hammers”) on the charts, which most of you should know, is very bullish on the short-term. The best part about these beautiful daily price patterns is that it is coming when the crowds nervousness is increasing. An excellent one-two punch.
The bears were talking their story heavy today as oil prices broke over $90, WCG got raided by the Fed (its stock CRASHED!!), and many stocks got taken to the woodshed over missed earnings or weak guidance. Now, while this was very negative for the stocks related to those stories, the market overall is not listening much. Even though we start the day weak we simply do not close that weak. That is because the fear is very thick out there still. And what some people don’t get is that even with new lows outpacing new highs as the Nasdaq hits new near-seven year highs, the markets can still rally a ton. There were 101 new highs to 146 new lows on the Nasdaq today, yet after MSFT rose 11%, the Nasdaq 100 was officially hitting new six and a half year highs. So this goes to show and prove that despite weakness in the market, the overall market can still rise.
Markets Close Lower But Stage An Impressive Intraday Reversal That Sent Stocks Well Off Their Lows; Bullish Hammer Candle Patterns Are Everywhere
October 25, 2007 | Leave a Comment
It wasn’t the most bullish day what-so-ever with the markets all down across the board. But the bullish intraday reversal that sent stocks well off the lows and near the HOD for most indexes has to be considered a successful outcome for the bulls. The Nasdaq, at one point, after the first two hours of the day, was down 2.8%. By the end of the day Nasdaq was only down .88%. This created a very bullish candlestick “hammer” pattern (indicates the index is hammering out a bottom) and when combined with the very bullish daily bars the past two days is nothing but bullish for the charts.
Two more indexes with beautiful similar patterns are the Nasdaq 100 and the IBD 100. The past three days, if you did not listen, watch, or read anything related to the stock market and then you took a look at these charts you would be very bullish on the market. However, most are bearish after the recent action since Friday which continues to make me bullish on the short-term despite the distribution.
Yes, today was a distribution on all the indexes. That now gives the Nasdaq five distribution days the past few weeks. However, the Nasdaq 100 just recently hit another new 6 1/2 year high and the Nasdaq is still well above the 50 day moving average, so it is best to remain with our bullish bias but just be aware that further weakness would be very negative. That would then lead us to take profits on stocks we have gains on in order to protect our profits from a possible selloff.
Did You Panic Last Friday?
October 24, 2007 | Leave a Comment
Were you ready yesterday? Maui was, check out what you would have gotten as a Platinum Subcriber:
[2007-10-23 00:30:11] [MauiTrader's Lounge] Brian : I gotta admit, I am afraid of a gap-up open.
[2007-10-23 01:28:03] [MauiTrader's Lounge] MauiTrader : aloha
[2007-10-23 01:28:05] [MauiTrader's Lounge] MauiTrader : well brian
[2007-10-23 01:28:08] [MauiTrader's Lounge] MauiTrader : i hope this gap open
[2007-10-23 01:28:13] [MauiTrader's Lounge] MauiTrader : ends with a close at HOD EOD
[2007-10-23 01:28:16] [MauiTrader's Lounge] MauiTrader : that on top of the
[2007-10-23 01:28:19] [MauiTrader's Lounge] MauiTrader : gap lower and HOD close
[2007-10-23 01:28:23] [MauiTrader's Lounge] MauiTrader : would be the greatest thing
Information like this, can only increase your bottom line.
My Perfect Scenario From Yesterday Comes True As Stock Indexes Rally Higher And Close At Their HOD After A Bullish Intraday Reversal
October 24, 2007 | Leave a Comment
Well it doesn’t get much better than that. After opening higher, the major market indexes all reversed and started moving lower giving up the morning gap. But then, if as the market was listening to me (don’t I wish), the market did just what I asked of it last night and rallied higher the rest of the day closing at the HOD. What made it better was that the Nasdaq led the way among the major indexes and did so on a very nice surge in volume. And today’s volume was in no way options related like the volume on Friday’s extreme selloff.
Volume was lower on the NYSE but the gains were still very strong as the NYSE still put in a 1.1% gain. Also, if anybody gets IBD, you should look at the “stocks on the move” section on page B1. It will clearly show you that there was plenty of strength in leading NYSE stocks to confirm the rally despite the lack of volume. In fact, you might say that it is more bullish for us that the Nasdaq was not only up more than the NYSE but had higher volume. That means that the speculative juices are flowing and that is always good for us trend followers.
For those that did not notice, the Nasdaq 100 rallied a powerful 2.2% as the big-cap tech stocks enjoyed today’s gains the most. Leaders like AAPL, BIDU, GOOG, and RIMM all hit new 52-week highs today. How in the heck can you be bearish on this market when the top four high-tech growth stocks are hitting new highs and doing it on higher volume. Are they all in climax runs? Yes they are. But you have to understand that if this is anything like the rally in 2000 where JDSU and QCOM went up over 2000% from their lows in 1998 to its 2000 top, these stocks could have one or two more “crazy climatic” legs like they are having now. So calling tops here is where the majority of traders end up getting out of top stocks and miss out on huge gains.
Stocks Rally Higher On Lower Volume, Much To The Dismay Of Those Who Panicked And Sold The Open
October 23, 2007 | 1 Comment
Nothing is more bullish in a stock market than when a market opens up at its LOD and rallies higher all day long and closes at its HOD. That scenario is made even more impressive when the market gaps lower like it did on Monday. And the last scenario that makes it perfect is to have higher volume. Darn it, it wasn’t perfect.
And that pretty much sums up today’s rally: it wasn’t perfect. To make a day like today perfect stock indexes would have had to open lower than the close on Friday (check), did it at its LOD (check on Nassy), rallied the rest of the day (check), closed at its HOD (check), and close higher than the previous days open (NO CHECK). If that situation would have happened, I would be slamming my fist on the table screaming that “we are going higher.” However, since the situation I laid out did not happen, I can not be super bullish about today’s bounce.
What I can say about today’s bounce is that “I told you so.” Those who panic in the stock market are doomed to a life of sub-par returns. And the reason for that should be clear. The stock market has some of its most wildly bullish days during bear markets and has its most bearish days during bull markets. This is what constantly is able to scare weak longs/shorts out of their positions into stronger hands before the trend can resume.
Anniversary Of The 1987 Crash Sets The Stage For A Mini Stock Market Crash As Stocks Selloff On Higher Volume; NOW And Only NOW Can You Even Think Of Getting Bearish
October 19, 2007 | 5 Comments
Boy oh boy was it ever ugly on Friday, with the whole market selling off leaving no room to hide. When it was all over, every index lost 2% with the Russell 200 leading the way lower with a 3.2% whack. The IBD 100 loaded of leading stocks also fell 3.4%, showing that there was no where to hide. My portfolio took a 5.3% hit but overall when I look at everything I have to admit that most longs continue to look good, 75% pulled back on lower volume, and the stocks I did sell were either cheap POS stocks or were recent longs that were not large buys which saved me from major carnage. So before I go any further into my analysis I have to apologize for not getting irrational and losing my mind by panicking over a one day selloff. I simply can’t lose my cool, when everyone else is.
What made the selling worse and that has to raise our yellow flags is that volume expanded by quite a large margin on the NYSE. But volume was only slightly higher than the volume on Wednesday on the Nasdaq. So the volume was not unbelievable. Also the NYSE volume was still well below all the volume in August. So when we honestly look at the volume situation we have to admit that it was bad in the fact that volume was over the 50 day volume average on the NYSE and the Nasdaq. But with volume on the NYSE lower than the highest levels on the September rally and well below the heavy volume in August, can we really say it was that bad? And just by looking at the Nasdaq, it becomes clear that the volume was not that bad at all. Now, on top of that, remember that is was also monthly options expiration and that added to the volume. If you take out the option volume, the volume would have been either slightly below or above the 50 day volume average. It simply wouldn’t have been real distribution.
Afternoon Rally Sends Stocks Higher As The Nasdaq Closes Near Session Highs; The Bears, Since August 16th, Continue To Look Like Fools
October 19, 2007 | 1 Comment
Today’s action has to, once again, be taken as a win for the bulls, after early morning weakness from BAC and EBAY missing Q3 earnings sent all the indexes to the negative column. The selling was bad but the fact that it did not pick up at all as the day went on was the first clue that the bears might not be able to hold onto the gains. The one negative that can be taken away from the positive turn of events is that, unlike yesterday, volume did not pick up as stocks turned around and rallied higher.
Still, I am not sure that I would be too worried about that, at this moment. The amount of top quality longs and strong speculative longs that are making very good sized gains in this low VIX environment is the clear signal that the market is bullish and that being short is just not the right play. When you have this many longs making these kind of gains that I have had it is just simply foolish and damn right wrong to even think of jumping off the bullish trend just because some people are talking about the market “just has to” make a top.
I did see somewhere today that someone has a model that has never seen the Nasdaq 100 hit a new cycle high yet have over 100 new 52-week lows like we had today–we had over 200, by the way. That along with the fact that the Investors Intelligence shows 62% of newsletter writers are bullish to 19% is bearish is very extreme. However, that is just opinions. That does not actually judge what they are doing with their money.
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